Form C misuse without prior registration led to reduced penalty, as shared fault was recognised in the import process.

Import of cement using Form C without first obtaining registration under the Central Sales Tax Act attracted penalty because the importer remained responsible for securing registration before seeking the concessional form. The authorities also contributed to the error by issuing Form C without verifying the registration position, so the default was not treated as wholly attributable to one side. On that factual basis, the penalty was reduced from Rs. 26,000 to Rs. 5,000.

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Issues: Whether penalty imposed for import of cement by using Form C without obtaining registration under the Central Sales Tax Act should be sustained in full or reduced.

Analysis: The applicant applied for Form C for import of cement from outside Uttar Pradesh without first obtaining the necessary registration for that business activity. The authorities issued Form C without verifying the registration position. The default was treated as one in which both sides contributed to the error, but the primary obligation to secure registration before seeking Form C remained with the importer.

Conclusion: The penalty was reduced from Rs. 26,000 to Rs. 5,000.

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